Investment Banking Guide Vanderbilt University

Summary

Investment Banking Guide
©Vanderbilt University. All rights reserved

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INTRODUCTION & ACKNOWLEDGEMENT
Are you considering a career in investment banking? This guide will help you learn
about the industry, develop an understanding of the recruitment process, and provide
you with a plethora of resources for effective interview preparation

Filled with guidance and advice for successful investment banking recruiting, this
guidebook will help you:
 Comprehend the investment banking industry
 Understand how to navigate the recruitment process
 Develop a strategy for behavioral and technical interview preparation
 Obtain practical insights on the power and influence of networking
 Explore numerous resources to facilitate self-learning
This project would not have been possible without the time and support of Vanderbilt
student Ashlyn Dong. Thank you for your significant efforts on this guide

DISCLAIMER: This guide is intended for informational/educational purposes only

Please use the references and hyperlinked citations to access articles and up-to-date
information. If you have any questions, please reach out directly to
[email protected]

Updated Last: 8/3/2020 by Allison Otto
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Table of Contents
1 Introduction ................................................................................................................ 4
2 Investment Banking in a Nutshell ............................................................................. 4
2.1 What is Investment Banking .................................................................................... 4
2.2 Core Activities at Investment Banks ....................................................................... 4
2.3 Investment Banking Group Structure ..................................................................... 5
2.4 Different Types of Investment Banks ...................................................................... 6
2.5 Major Players ............................................................................................................ 7
2.6 Investment Banking Hierarchy & Deal Team Structure.......................................... 8
2.7 Compensation & Hours ............................................................................................ 8
2.8 Internship Structures ............................................................................................... 9
2.9 Common Tasks for Analysts ................................................................................... 9
3. Recruiting Components .......................................................................................... 11
3.1 The Recruiting Schedule .........................................................................................11
3.2 Core Recruiting Process .........................................................................................12
3.3 Non-Core Recruiting Process .................................................................................13
3.4 Key Resources.........................................................................................................17
Best Internet Resources Overall ............................................................................................ 19
4 Conferences | Rotational Programs ....................................................................... 19
5. Alternative Options ................................................................................................. 20
6. Appendix .................................................................................................................. 20
6.1 Overview of Career Opportunities ..........................................................................20
6.2 Hierarchy (In-depth).................................................................................................24
6.3 More Resources.......................................................................................................24
6.4 Difference between Investment Banking and Commercial Banking ....................24
6.5 Investment Banking Analyst Program ...................................................................25
6.6 Cold Email Templates .............................................................................................25
6.7 Phone Interview Cheat Sheet ..................................................................................25
6.8 Off-Cycle Recruiting ................................................................................................27
References ................................................................................................................... 27
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1 Introduction
This is a one-stop-shop guide that covers the ins-and-outs of the Investment Banking
recruiting process. Read it through once to get familiar with the entire process, then feel
free to keep it as a reference

2 Investment Banking in a Nutshell
2.1 What is Investment Banking
Street of Walls (2019) explains that, investment banks perform two basic, critical functions. First,
investment banks act as intermediaries between those entities that demand capital (e.g

corporations) and those that supply it (e.g. investors). This process is mainly facilitated through
debt and equity offerings by companies. Second, investment banks advise corporations on
mergers, acquisitions, restructurings, and other major corporate actions. While the majority of
investment banks perform these two functions, it is important to know which products and services
each bank specializes in (Street of Walls, 2019)

2.2 Core Activities at Investment Banks
Corporate Finance Institute (2020) describes how an investment bank is comprised of four main
areas: investment banking division (IBD), sales and trading (S&T), Equity Research, and Asset
Management

Large global banks will typically offer all three services, whereas smaller banks usually focus more
on the investment banking division side covering advisory and mergers and acquisitions
(Questrom School of Business, 2019)

1. Corporate Finance (this function is most commonly referred to as “Investment Banking”):
Assist corporations in raising capital through debt and equity capital markets, and provide
advisory services on mergers and acquisitions (M&A) and other corporate transactions
(Street of Walls, 2013)

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2. Sales and Trading: Buy and sell securities and other financial instruments as an
intermediary on behalf of its clients (Street of Walls, 2013)

3. Equity Research: Provide detailed company and industry research reports and make
recommendations on whether to buy, sell, or hold public securities (Street of Walls, 2013).

4. Asset Management: Provide equity, fixed income, money market, and alternative
investment products and services to individual and institutional clients (Street of Walls,
2013)

 Go to Appendix for more detail
2.3 Investment Banking Group Structure
Wall Street Oasis (2019) describes how the investment banking division is split into two sectors:
products and industries. The purpose of both is to provide advisory on transactions, mergers and
acquisitions and to arrange (and occasionally even provide) financing for these transactions. Each
group handles its own client accounts, and is responsible for a designated product or industry
sector (Wall Street Oasis, 2019)

 Product groups: Differentiated by what types of services or financial products the
groups provide. Typical groups include Mergers and Acquisitions (M&A), Leveraged
Finance (Lev Fin), Equity Capital Markets (ECM), Debt Capital Markets (DCM) and
Restructuring. These groups focus only on their specific products and can work across all
industry groups. They generally work and collaborate with industry groups on the more
intricate and specialized needs of a client towards the end of a deal process (Street of
Walls, 2013)

 Industry/Coverage groups: Differentiated by what types of clients the groups serve

Typical groups include Healthcare, Technology, Media, Telecom (TMT), Financial
Institutions Group (FIG), Natural Resources, Consumer & Retail (C&R), Industrials, Real
Estate, Gaming and Lodging, and Financial Sponsors. Industry groups cover all
companies in a specified industry, but have exposure to a variety of products including
debt, equity, and M&A (Street of Walls, 2013)

o Financial Sponsors is a unique coverage group as it does not cover a specified
industry but instead serves only Private Equity firms. Private Equity firms may own
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multiple “portfolio” companies across a variety of industries and have a series of
unique investment banking needs (Street of Walls, 2013)

Lastly, industry groups cover all products and product groups cover all industries

A word of caution: An analyst’s experience in a certain group can be vastly different from another
group depending on the investment bank and group structure. Each bank has its own strengths
and weaknesses across groups relative to its peers. One example, Goldman Sachs does not
have a standard M&A group, while Morgan Stanley relies significantly on its M&A group for deal
execution and less on its Industry/Coverage groups for deal execution (Street of Walls, 2013)

2.4 Different Types of Investment Banks
Bulge Bracket vs. Middle Market vs. Boutique
 Many different companies are referred to as being investment banks, and they are usually
segmented according to their revenue, size of deals, geography, and services offered,
often categorized by the ‘league tables’ (Lee & Lott, 2013)

 The 9 largest banks are called the ‘bulge bracket,’ followed by ‘middle market’ and
‘boutiques’ (Lee & Lott, 2013)

 Bulge bracket and middle market banks tend to be full- service while boutiques tend to
focus on advisory roles and sometimes provide asset management. The line between
middle market vs. boutique is fuzzy and complex. To the layperson, middle-market banks
are “bigger” than boutiques but “smaller” than bulge bracket banks – which isn’t wrong,
necessarily, but also doesn’t tell the full story (Lee & Lott, 2013)

 Elite boutiques work on the same deals as bulge bracket banks but are more focused (Lee
& Lott, 2013)

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2.5 Major Players
This is a list of top players across the entire spectrum of investment banks from Bulge Brackets
to Middle Markets to Boutiques

 Goldman Sachs & Co

 Morgan Stanley
 J.P. Morgan
 Evercore
 Lazard
 Centerview Partners
 Moelis & Company
 Credit Suisse
 Bank of America Merrill Lynch (Bank of America (BOA) acquired Merrill Lynch in 2008)
 Barclays Investment Bank (Americas) (Barclays acquired the North American operations
of Lehman Brothers in 2008)
 Perella Weinberg Partners
 Greenhill & Co., Inc

 PJT Partners
 Citi Institutional Clients Group
 Jefferies
 Rothschild
 Guggenheim Securities
 UBS
 Allen & Company LLC
 Qatalyst Partners
 Houlihan Lokey
 Deutsche Bank AG
 RBC Capital Markets
 Wells Fargo & Company
 William Blair
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 Go to this link for a more thorough understanding of Bulge Bracket vs. Boutique Investment
Banks
 Go to this link for an in-depth discussion of Middle Market Investment Banks
2.6 Investment Banking Hierarchy & Deal Team Structure
Corporate hierarchy: The investment banking seniority structure is very strict. A typical hierarchy
includes (from most Junior to most Senior): Analyst  Associate  Vice President  Senior Vice
President/Director/Executive Director  Managing Director (Street of Walls, 2013)

 Analysts will tend to work almost exclusively with an Associate, and the Analyst-Associate
pair will be responsible for the majority of deliverables in a typical client engagement

Deal team structure: Investment banking deals are done in small teams of 4-6 bankers who
usually work with one analyst, one associate, one vice president, possibly a director, and the lead
managing director on the deal (Street of Walls, 2019)

 Workflow is executed from the bottom-up: analysts create the material, which is quickly
approved up the team hierarchy, to the managing director on the deal. The managing
director will have final say on all deal material before it is shown and shared with the client
(Street of Walls, 2013).

 It is very common for deal teams to consist of bankers from across product or coverage
groups depending on the type of deal or engagement (Street of Walls, 2013)

 Go to the Appendix for more detail about corporate hierarchy in investment banks
(more than the investment banking division)
2.7 Compensation & Hours
Compensation: First-year investment bankers typically receive a $10k signing bonus and $70k base
salary. Interns are usually compensated on a pro-rated basis, based on first-year salaries plus
overtime. Bonuses will be paid out at the end of the year and can vary significantly as a function of the
banker’s productivity as well as the performance of the group and the bank as a whole (Street of Walls,
2013)

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Hours: Investment banking analysts generally work 80-110 hour workweeks – expect to have very
little free time outside of the office, especially during the first year on the job. A typical day will be
somewhere in the range of 10am to 2am; this often includes weekends (or at least part of them). This
schedule will likely stay the same for all seven days of the week and pulling all-nighters (or
sometimes multiple in a row) is common. In recently years, banks start to implement protected
Saturdays, but the enforceability varies across firms and groups (Street of Walls, 2013)

 The higher you go up the ladder, the less time at the office – associates usually put in less
time than analysts, VPs put in less time than associates, etc (Street of Walls, 2013)

2.8 Internship Structures
The internship normally lasts ten weeks. If your internship is at a bulge bracket, you will go through
a placement day and be placed into a specific group, healthcare for example; if you work at a
smaller bank, you are likely to receive a generalist offer and you will work on assignments from
different groups. Internship typically starts late May/early June of you junior year with the recruiting
timeline starting in April of your sophomore year throughout the summer leading into your junior
year. If you are very interested in investment banking and want to gain relevant experience prior
to internship recruiting, looking into summer conferences or rotational programs at the banks your
first-year or sophomore year is a good idea

2.9 Common Tasks for Analysts
Duties performed by an analyst include company valuation, compiling pitch books and building
complex financial models. See the table below

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Responsibility Descriptions Typical Deliverable
Financial Analysis Use of excel models to DCF, LBO, Comparable
provide transaction, valuation, Companies and Comparable
and/or financial analysis Transactions (Comps),
Merger Models, Working
Capital Analysis, Flow of
Funds, etc

Research Perform detailed research Industry-related slides for
and due diligence on pitch books and other ad-hoc
industries covered. Analysts reports that are used to help
will use information from a prepare senior level bankers
variety of databases to prior to meetings
analyze trends, competitors,
capital markets, and other
industry dynamics

Create Pitch Books A pitch book are marketing A PowerPoint presentation
material for the bankers to that includes firm
present to corporate clients to qualifications, industry
secure deals research, potential
buyer/investor pools,
valuation analysis, and
transaction considerations
Other Responsibilities Analysts at a boutique Client presentations, investor
investment bank will also be presentations, offering
asked to attend client memorandums, creation and
meetings, prepare marketing management of data rooms
materials, and assist with deal
management
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3. Recruiting Components
3.1 The Recruiting Schedule
Street of Walls (2019) explains that generally, the largest investment banks are the ones with the
most structured interview processes—they have a thorough and rigid recruiting game plan each
year. This differs from smaller boutiques, who will usually hire more on an as-needed basis. The
investment banking recruiting process at larger banks is typically divided between “core” and
“non-core” college recruiting. Different phrasing used could be called “target” and “non-target” as
well. Banks have a certain number of core (target) schools at which they interview on-campus
each year; they typically allocate a certain number of job slots from each school for their incoming
analyst and associate classes. Whatever is leftover after “core” interviewing constitutes the “non-
core” recruiting; this process typically trails core interviewing by a few months (Street of Walls,
2019)

Core recruiting makes up roughly 70% of total hiring for analyst programs for the Bulge Bracket
banks. The makeup of recruiting from “core” schools always differs by bank, but it will typically
include core school recruiting from the top 10-15 business and liberal arts schools across the
country (Street of Walls, 2019)

Non-core recruiting is conducted differently. Most candidates are introduced to the recruitment
process via internal referrals and, to a lesser extent, online applications. You are competing for
internship slots with tens of thousands of applicants from other non-core schools and that is why
networking is extremely important to make you stand out and validate your credibility (Street of
Walls, 2019)

Now, compare this to the number of job slots: a typical Bulge Bracket investment bank generally
hires about 60-80 first-year analysts every year, with a majority being internship hires. Roughly,
900 first-year analysts are hired every year in the United States, with a majority of these coming
from the Bulge Bracket banks (Street of Walls, 2019). Things may be different in terms of hiring
needs during times of economic downturn

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3.2 Core Recruiting Process
Street of Walls (2019) explains how the core recruiting process is done in 3 steps. (Steps 4 and
5 are strictly on the candidate side and do not directly affect the banks themselves.)
STEP 1: SUBMITTING RESUME / INFORMATION SESSIONS
The first step is applying online via Doreways and/or through the individual banks’ websites. Make
sure you are checking the dates/deadlines! (Maybe put together a little spreadsheet to stay
organized). The investment banks will then bundle up the collected resumes into a book and send
them around their office for current investment banking employees at the bank to peruse (usually
1st and 2nd year analysts) (Street of Walls, 2013)

Banks will also host information sessions on college campuses a month or two before interviewing
starts. The information sessions typically only last for an hour and it gives candidates an
opportunity to learn more about the bank and network with a few professionals from the firm

These information sessions provide candidates a great opportunity to stand out. Come prepared
to these sessions with thoughtful questions and make sure to follow-up with thank you emails
(Street of Walls, 2019)

STEP 2: ON-CAMPUS INTERVIEW
Interviewees are selected for on-campus interviews based on feedback from the information
sessions and their resumes. The investment banks will work with the Vanderbilt Career Center to
schedule a time to interview accepted candidates on-campus. These generally consist of 30-45
minute interview slots, where candidates will meet with 1-2 investment bankers (usually
Associates and VPs). There will be both behavioral and technical questions asked — so make
sure spend a lot of time in advance preparing for classic investment banking interview questions
beforehand (Street of Walls, 2019)

STEP 3: SUPERDAY
The third step in the core recruiting process is called a “Superday” (or something similar). A
Superday will typically be your final round of interviews, and it can be grueling. It will occur on-
site at the bank, and it usually lasts from about 8am to 6pm with as many as 8-12 interviews. At
the bare minimum, you will meet with at least one analyst, one associate, one VP and one MD

Plus, there will be interviews with 4-8 other individuals of various groups/ranks within the firm

©Vanderbilt University. All rights reserved

Little free time outside of the office, especially during the first year on the job. A typical day will be somewhere in the range of 10am to 2am; this often includes weekends (or at least part of them). This schedule will likely stay the same for all seven days of the week and pulling all-nighters (or sometimes multiple in a row) is common.

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Frequently Asked Questions

How big is the endowment at vanderbilt university?

Totaling over $10 billion as of June 30, 2021, Vanderbilt has one of the 20 largest university endowments in the U.S. The office is comprised of 25 staff members across three teams: operations, public investments, and private investments.

Is there a guidebook for investment banking recruiting?

Filled with guidance and advice for successful investment banking recruiting, this guidebook will help you:

Does the university of pennsylvania have an investment banking program?

University of Pennsylvania Investment Banking Program. The University of Pennsylvania is one of the most prestigious institutions of higher learning in the world. The department offers a large number of upper-level courses in a variety of these areas, and students are encouraged to choose among these broadly, to develop their skills wisely.

Is georgetown a good school for investment banking?

Georgetown University is the oldest and largest Catholic and Jesuit University in America. University’s McDonough School of Business has ranked as the No. 1 undergraduate school for Investment Bankers and No. 3 for Finance Professionals. It offers some of the best chances for favorable outcomes in the field of investment banking and finance.